Southwest Bank of St. Louis, frequently a leader in reducing the prime lending rate, said Friday it will trim that benchmark for commercial and consumer loans to 9.75 percent from 10 percent as of Monday.

"We think it's good for the economy, good for the bank, good for our customers," said I.A. Long, chairman emeritus of the Missouri bank long known for leading the way in slashing the prime lending rate.The Midwestern institution's move anticipated by a few hours actions taken by the Federal Reserve to lower short-term money market interest rates following the release of government data showing surging joblessness.

"I think that it's prime time for a prime cut," said economist David Brinner, who follows business and consumer issues for Data Resources Inc. of Lexington, Mass., a McGraw-Hill Inc. unit. "It's appropriate. I believe the large banks will have to follow, if not this week then next."

But Long, 91, said he not only doubted big banks would rapidly follow, but he didn't mind a bit. "We get awfully good public relations as a result of being the lowest prime rate in the nation," he said.

Southwest's cut was matched later Friday by Manufacturers & Traders Bank of Buffalo, N.Y., a unit of First Empire State Corp., and First Fidelity Bancorp of Lawrenceville, N.J., but no major banks dropped the rate.

The last time Southwest and other banks cut the prime rate, offered to their most creditworthy commercial clients and frequently the basis for setting home equity and other consumer lending rates, was Jan. 8. At that time the prime was brought down to 10 percent from 10.5 percent.

Since then, the Federal Reserve has lowered the key federal funds rate, which banks charge each other for the short-term use of reserve funds and serves as a building block for other rates, to 7.25 percent from 8.25 percent.

That means the spread, or margin, between the Fed funds rate and the prime has widened to 2.75 percent from 1.75 percent for banks that haven't followed Southwest in its quarter-point prime cut. Banks have been slow to narrow that spread, say analysts, because their profits are so poor.